Market Gazer Hong Kong - Japan - Germany - UK - North America
market review : Europe & US
European shares ended mixed with FTSE
100 gained 0.09% to 5,578.44 but the DAX
index fell 0.04% to end at 6,276.09. US
consumer confidence data hit the
investors’ mood earlier, but US shares
recovered and escaped from the red as
Dow Jones Industrial Average ended up
46.10 or 0.43% at 10,858.14. Nasdaq
Composite also ended up 0.41% at
2,379.59, while S&P 500 finished the day
at 1,147.70 or up 0.49%.
Worries over European
fiscal health returned as
Anglo Irish Bank Corp. was
rumored to be needing for a
bailout by the Irish government. Recent
report by S&P suggested that the cost for
bailing out the bank would even exceed
€35 billion. Irish Foreign Minister Micheal
Martin on Tuesday said that Ireland does
not need to activate the bailout package
and that the government will issue details
on the matter by the end of the week to
calm the market. On Tuesday, Irish-
German spread on 10-year debt climbed
to 448 basis points from 430.
US Consumer Confidence for September
fell to 48.5 from 53.2, below the
consensus of 52.1, while S&P/Case-Shiller
Home Price Index for July edged up to
148.91 from 147.95. Month-on-month,
the index fell 0.13% after a 0.24% increase
in June, more than expected 0.1% decline.
Year-on-year, the index rose 3.18%,
slower than June’s 4.21% increase, but
above the consensus of 3.1% increase.
28 September 2010
In Germany, the harmonized consumer
price index fell 0.2% in September,
reversing a 0.1% rise in August. Year-on-
year, the inflation gauge accelerated to a
rise of 1.3% in September from an
advance of 1% in August. Consumer
confidence survey in Germany however,
showed that the mood is expected to
increase as October index rose to 4.9 from
4.3, better than the consensus reading of
4.2.
UK’s current account deficit narrowed
from 11.3 billion to 7.4 billion, better than
the consensus of 8.2 billion worth of
deficit. Gross GDP for the second quarter
stayed unchanged at 1.2% (q/q) and 1.7%
(y/y). Meanwhile, CBI reported sales
index climbed to 49 in September, nearly
double the expected reading of 25, and
better than sales in August which stood at
35.
No key data to be released on Wednesday
in the US, but Japan’s Tankan index
should be interesting to watch. Large All
Industry capital expenditures are
expected to rise by 4.2% in 3Q, up from a
rise of 2.7% in 2Q. Large manufacturers
index is seen at 6, up from prior reading of
1. Outlook for large manufacturers is seen
at 1 and similarly, outlook for non-
manufacturers is seen falling to -5. Non-
manufacturers’ index however, is seen
improving from -5 to -2 in 3Q. The risk lies
with the yen value, as recent surge in yen
strength may hurt sentiment among
exporters and thereby weighed on their
mood during 3Q. Despite the intervention
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 Market Gazer
conducted by the Japanese authorities,
the effect may not last long as it was
conducted unilaterally.
Hewlett-Packard
remains in search for a
new CEO after most
analysts dismissed
recent speculation that Apple’s Chief
Operating Officer Tim Cook was the
favorite for taking up the position at HP.
The company may consider internal
candidates such as Todd Bradley and
David Donatelli. There are three possible
emphasis: a consumer-oriented CEO, a
software/service-oriented CEO, or a
datacenter-oriented one. The company
holds its analyst day on late Tuesday. So
far, the shares finished at $41.62, up
0.87%.
Johnson & Johnson has been warned by
the US Food & Drug Administration (FDA)
over its mouthwash product, Listerine.
The FDA said that the product’s sodium
fluoride has not been proven to be
effective in removing plaque or
preventing gum disease. J&J will have 15
days to fix the product’s labeling. The
company’s spokeswoman said that J&J
will respond ‘in an appropriate and timely
manner’. J&J was not alone as CVS and
Walgreen were also received the same
warning from the FDA. J&J ended up
0.64% at $62.43.
BP Plc is set to sell its first
post-spill 5-year and 10-
year bond worth $3.5
billion. The sale will
28 September 2010
Hong Kong - Japan - Germany - UK - North America
commence as soon as Tuesday and the
company said that the timing is irrelevant
to the recent rig explosion at the Gulf of
Mexico. BP closed the day at 405.15
pence or up 0.31%.
Apple Inc. had its target raised to
$335 from $290 by JMP
Securities.
Siemens AG was downgraded from BUY
to HOLD by Societe Generale.
Oracle’s price target has been raised to
$34.00 from $31.00 by Barclays Plc. Its
rating was maintained at OVERWEIGHT.
Yahoo has been rated at NEUTRAL by
Gleacher.
Siemens settled at €77.73, down 0.14%;
Apple slipped 1.48% to $286.86; Oracle
rose 0.96% to $27.21; and Yahoo ended at
$14.39 or up 0.78%.
Other gainers on Tuesday were Prudential
(+3.57%), Pfizer (+1.49%), Marks &
Spencer (+1.45%), Texas Instruments
(+1.42%), Intel (+1.38%), and
ThyssenKrupp (+1.34%). Losers include
Adobe Systems (-2.23%), Deutsche Bank (-
2.19%), Commerzbank (-1.69%), Cisco
Systems (-1.12%) and Deutsche Boerse (-
0.71%).
Disclaimer: This report is provided for information purposes
only. It is not an offer to sell or to buy any securities. This
report has been prepared based on sources believed to be
reliable, but there is no assurance or guarantee regarding its
completeness & and accuracy. The author accepts no
responsibility or liability arising from any use of the report.
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